Jonathan Watts-Lay, Director at WEALTH at work comments on maximising workplace savings.
“I was interested to read the article last month on auto-enrolment and how the share scheme and
pension industry may best co-exist. In these challenging economic times employees have a number of
options to consider when choosing their workplace savings.
For those individuals not presently meeting the minimum requirements of auto-enrolment it
will have a negative impact on their disposable income. This could make the affordability of
workplace savings, such as share schemes and Individual Savings Accounts (ISAs), tough. However,
employees should not view the introduction of auto-enrolment as a ‘pay cut’ but use it to make
provision to secure their financial wellbeing.
This is where communication and
financial education are paramount, not only to understand the new regulations and
the workplace savings options, but to learn how to ‘maximise their value’.
Employees will have their own personal financial issues and are likely to have different
priorities, so different savings vehicles are required. While pensions are likely to remain part of
a longer term savings strategy and share schemes for the medium-term, the workplace ISA can be a
more flexible choice. It is also a useful savings vehicle for those senior employees who may be
affected by the restrictions to pension tax relief. Undoubtedly auto-enrolment will be a financial
strain to some, but with the benefit of financial education and specialist advice – the integration
of workplace savings such as share schemes with pension and workplace ISAs can only provide a more
prosperous financial future for all.”
See the full article on the
Pay
& Benefits website.
